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Home General Choosing Between Disability Insurance Companies: A Guide

Choosing Between Disability Insurance Companies: A Guide

Did you know disability insurance is one of the most important kinds of insurance? If you want to learn how to find the best long-term disability insurance provider, we can help.

In this guide, we’ll go over how to choose disability insurance providers.

Want to learn more? Keep reading.

Will You Get Employer-Sponsored or Individual Disability Policies?

Do you plan to buy disability insurance soon? Some people might have the chance to get coverage through their employer.

The advantage of these long-term disability policies is they are cheap. Your employer will pay for most of the premium.

If you’re able to afford it, you could buy an individual policy. You can enforce your policy under state bad faith law or deceptive trade practices acts.

These laws are advantageous for those fighting disability denials. Make sure you have long-term and short-term disability coverage.

If you buy individual disability coverage, the premiums will get based on a few factors. These factors include occupation, age, and health. These plans are more expensive, but you will get quality coverage.

Disabilities Defined

There are a few different ways to define disability. Make sure you understand the definition used by the potential insurance provider. A lot of policies will have two-tiered definitions of disability.

The disability standard gets defined as the insured worker is now unable to perform the duties of their Own Occupation. This refers to the job the person performed at the time they became disabled.

After 24 months, the standard of disability will move to a demanding standard. It’s defined as the insured worker being unable to perform Any Occupation. This means the worker has proved they can’t work at any job.

Under the Any Occupation standard, the worker must earn a part of their former salary. Usually, the percentage is up to 80 percent.

Don’t buy a plan that doesn’t contain this provision, and find a policy that uses the Any Occupation exclusively.

What About Portability?

If you end up buying insurance through your employer, find out if you can keep the insurance. If it is non-portable, you won’t keep the insurance when you go to another job.

Having a portable insurance policy will give people peace of mind. They will get covered no matter where they work. Most disability policies bought through an employer are mobile.

What About the Premium?

Premiums will vary depending on the insurance provider. Some policies will let you lock in a premium, while others won’t. You can get a guaranteed renewal policy or a non-cancelable policy.

The options will differ. Make sure you pick one that will suit your particular situation. A guaranteed renewal will let you renew your policy without making changes. Your premium will fluctuate.

A non-cancelable policy means your premiums and coverage won’t get changed as long as you pay your premiums on time.

What About Cost of Living Benefits?

Cost of living benefits doesn’t always get included in policies. Adding this to your policy is something to consider. Cost of living benefits provides financial stability because they offer an increasing benefit.

When you choose cost of living benefits, pick one that increases on a compounding basis. Compound interest will get earned on the interest and the principal.

The additional rider will help your benefits remain paced throughout inflation.

Residual Benefits

Make sure your disability insurance policy will include residual benefits. Residual benefits will make up your income if you work part-time. Residual benefits help you make up your income, which is critical.

Some insurance companies will put restrictions on residual benefits.

What About Collection Time?

It’s important to note the collection time. This could end up affecting what company you choose. Some policies will let you collect after 30 days when you file your disability claim.

The collection time will range from 30-700 days. This is a major deal-breaker for some people, so make sure you ask about it.

Coverage Changes

A lot of policies will get changed by the insurance company. Insurers can raise your coverage rates when they want whether your policy needs to get renewed.

Insurance companies can change the terms of coverage without letting you renew. It’s essential to understand when and how changes get made.

Make sure you look over the different quotes insurance companies provide. Consider these factors regarding long term disability insurance quotes.

What About Future Increase?

There’s a future increase option rider you could add to your disability coverage. It’s important to consider if your income will increase over time.

With this extra rider, you could increase the benefit of your policy no matter the status of your health. Without the rider, your policy won’t protect your future income.

Most insurance companies limit the extra coverage that gets implemented each year.

What About Renewability Provision?

How long will you expect to get covered? You should check the renewability provision of your disability insurance coverage.

The company can’t cancel a guaranteed renewable policy no matter if a change in your situation puts you at risk. With a guaranteed renewable policy, the insurance company could still change your premium.

Yet, a non-cancelable policy will offer a guaranteed future premium.

Disability Insurance Companies

We hope this guide on disability insurance companies was helpful.

Find a company that provides customer service and ones with a non-cancelable policy. If you get insurance through your employer, make sure it’s portable.

Are you looking for more financial tips? Stay around and browse our many resources.

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